The OAS (Old Age Security) pension makes up 1 out of the 3 main pillars of the retirement income system in Canada. The other pillars are CPP (Canada Pension Plan), and Individual Retirement Savings/Employment Pension Plans.

The OAS (universal) pension is one of the taxable monthly payments made available to people aged 65 or older who have met up with specific eligibility requirements. Unlike the CPP, OAS benefits are not linked to the employment history of the individual. You might still be eligible for receiving an OAS pension even when you are still working or you have never had a job or worked before.

Over and above the OAS pension, there is a few other benefits that the low-income seniors might qualify for. These include Allowance for the Survivor, Allowance, and the Guaranteed Income Supplement.

What Is Old Age Security Pension Plan ?

What You Need To Know About The OAS (Old Age Security) Pension

Eligibility For OAS Pension

– The person must be 65 years of age or older.

– If you reside in Canada: You have to be a Canadian citizen or lived in Canada for a minimum of 10 years since turning 18 and you have become a legal resident.

– If you live outside of Canada: You have to be a legal resident before leaving Canada, and you lived in Canada for a minimum of 20 years after turning 18 or you have to be a Canadian citizen.

There are other scenarios that you may become eligible for an OAS pension. For example, when you have resided in one of the countries where Canada has established social security agreements.

OAS Payment dates for 2020:

  • January 29, 2020
  • February 26, 2020
  • March 27, 2020
  • April 28, 2020
  • May 27, 2020
  • June 26, 2020
  • July 29, 2020
  • August 27, 2020
  • September 28, 2020
  • October 28, 2020
  • November 26, 2020
  • December 22, 2020

How Do You Apply For OAS Pension

If you would like to receive your OAS pension as you turn 65 years of age, send the application in one month after you have turned 64.

How Much OAS Benefits Can You Expect To Receive In 2020?

The amount that you receive every month will depend on how many years you have stayed in Canada after you turned 18.

In order to qualify for the full OAS pension, the applicant should have resided in Canada for a minimum of 40 years, after they have turned 18. You will only receive partial benefits when you have not lived in Canada for the 40 year period.

Partial pension benefits are 1/40th of the complete pension amount that is worked out on every year that you have resided in Canada after turning 18 years of age. For instance, if you were living in Canada for a period of 20 years after turning 18, you will be eligible to receive 20/40th or 50% of the benefit.

OAS benefits undergo adjustments every quarter in January, April, July, and October according to the prevailing CPI (Consumer Price Index). From January to March (the first quarter of 2020), the monthly maximum OAS benefit will be $613.53.

OAS Deferral Option

Since the 1st of July 2013, individuals are now able to defer their OAS pension voluntarily for a maximum of 5 years, from the date the individual became eligible. The deferral ensures that they become eligible for a monthly pension that is higher at a later date. For each month that the OAS is deferred, their pension amount on a monthly basis will increase by 0.6% up to a 36% maximum at the age of 70.

OAS Clawback – Officially Called The OAS Recovery Tax

Your OAS benefit can be decreased by the clawback when your overall net income from the last calendar year has exceeded $75,910 in 2018, $77,580 in 2019, and $79,054 in 2020. When your income (net) has exceeded this amount, then you are required to return 15% (pay back) of this excess income to the total maximum amount of the OAS benefit that you received. The deduction can be compared to an added 15% tax over and above your latest tax rate.

An example of an OAS clawback: In 2017, the threshold for net income was set at $74,789. If you had a net income of $85,000, the $10,211 excess would activate a clawback amount of $1,531.65 (15% X $10,211). This would then lead to a reduction in monthly OAS benefits of $127.64 for the period between July 2018 and June 2019.

For the first quarter of 2020 (January to March), if your income (net) exceeds $128,137, then your OAS benefit will fall away (reduced to zero).